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This article provides an overview of underutilised people in New Zealand’s labour market for the June 2016 quarter. The statistics used here are based on Statistics New Zealand’s new official measure of underutilisation, which uses data from the Household Labour Force Survey (HLFS).

Labour underutilisation reflects the total number of people in the labour force who are not being fully utilised (ie either unemployed or underemployed), as well as the ‘potential labour force’ who are not in the labour force and were:

actively seeking work but were not available to have started work in the reference week but would become available within the next four weeks (ie unavailable jobseekers), or

not actively seeking work but would like a paid job and were available in the reference week (ie available potential jobseekers).

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New Zealand underutilisation rate lower than OECD average

In the December 2015 quarter (latest available for most countries), the underutilisation and unemployment rates for Organisation for Economic Co-operation and Development (OECD) countries showed New Zealand had an underutilisation rate of 12.8 percent (see figure 1). This rate is below the OECD average of 14.1 percent. Our underutilisation rate was lower than for Australia (21.8 percent), but higher than that for the United Kingdom (11.2 percent) and the United States (10.0 percent).

Figure 1

Underutilisation over time

Unemployment and underutilisation rates follow broadly similar patterns over time, as shown in figure 2. However, the underutilisation rate shows a higher level of unutilised labour resource than the unemployment rate. In the June 2016 quarter compared with the June 2015 quarter, the underutilisation rate decreased 0.5 percentage points to 12.7 percent.

Figure 2

Note: The full criteria for defining the potential labour force component of underutilisation is available only from the June 2016 quarter onwards. Before the redesigned HLFS, we could not measure accurately the ‘available potential jobseeker’ group as the survey did not ask if an individual not seeking work would like a job or not. We created a time series back to the March 2004 quarter of the HLFS, but note that there may be a discontinuity due to the inclusion of full criteria from the June 2016 quarter onwards. (For more information see Introducing underutilisation in the labour market.)

Women have a higher rate of underutilisation than men

In the June 2016 quarter, more women were underemployed and in the potential labour force than men (see figure 3). The number of underemployed women was much higher than men, with women accounting for two-thirds of the total number of underemployed. The potential labour force also had more women, of which 85.9 percent were not actively seeking work but were available to work (available potential jobseekers).

Overall, women had a higher underutilisation rate in the June 2016 quarter, at 15.6 percent compared with 10.1 percent for men.

Figure 3

Youth more likely to be underutilised

Both the number of people underutilised and the underutilisation rate generally decrease as age increases (see figure 4). In the June 2016 quarter, two age groups (15–19 and 20–24) had the highest underutilisation rates compared with other age groups. These age groups had both the highest numbers and rates of underemployment, unemployment, potential labour force, and underutilisation.

Figure 4

Underutilisation rate highest for Māori

In the June 2016 quarter, both the underutilisation and unemployment rates generally followed the same pattern across the ethnic groups (see figure 5). However, underutilisation rate is much higher than the unemployment rate. Māori had the highest rate of underutilisation (22.8 percent) followed by Pacific people (18.8 percent), Asians (14.6 percent), and Europeans (10.9 percent).

Figure 5

People with tertiary qualifications have lower underutilisation rates

Generally, people with tertiary qualifications have a lower underutilisation rate than those with secondary school or no qualifications (see figure 6). People with no qualifications have the highest number of available potential jobseekers, accounting for 30.4 percent of the total. However, people with secondary school qualifications (lower and upper secondary school) have the highest number of underemployed, accounting for 35.1 percent of total underemployed.